Rhoades v. Banking, Trust & Mortgage Co.

Citations

• 125 Va. 320
• 99 S.E. 673
• 1919 Va. LEXIS 26

Syllabus

<p>1. Stock and Stockholders — Subscription—Misrepresentation or Fraud — Rescission.—One who is induced by fraud or material false representations as to matters of fact to subscribe for stock in a corporation may rescind his agreement on discovery of the fraud, and may have the aid of a court of equity to make-his rescission effective and either to release him from liability on his subscription or to recover back what he has paid, Xnd it is immaterial whether the party making the material false representation knew the representation to be false at the-time.it was made or not, and whether made with fraudulent intent or not.</p> <p>2. Stock and Stockholdeks — Subscription—Misrepresentation or Fraud — Existing Fact. — The misrepresentation, to entitle a. subscriber of stock to relief, must have been one of existing-fact. Mere puffing statements or talk as to future prospects,, consisting of matters of opinion, will not have that effect.</p> <p>3. Stock .and STOCKHOLDERS — Subscription—Misrepresentation or Fraud — Proof.—Allegations of misrepresentation, partaking as they do of the nature of allegations of fraud, even in cases, where no actual fraudulent intent exists, must be clearly proved by evidence which is unequivocal and convincing in its character.</p> <p>4. Stock and Stockholders — Subscription — Misrepresentation or- ■ Fraud — Rccission-—Case ai Bar. — Among the objects and purposes for which a corporation was organized was a plan that, it would lend money on real estate mortgages at five per cent, per annum and would-obtain the money with which to do such business from northern insurance companies at the rate of four-per cent, per annum. It was in evidence that agents soliciting-subscriptions to the stock of the proposed corporation represented to certain subscribers that a contract had been in fact, secured and made with northern insurance companies to furnish as much as $20,000,000 at not over four per cent, per an-that such subscribers believed and relied